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Cebu Pac seen getting bigger planes

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Cebu Pac seen getting bigger planes

/ 04:23 AM December 07, 2016

Budget airline Cebu Pacific Air is evaluating the acquisition of larger long-range aircraft, including Airbus A350s and Boeing 787s, which would allow access to the lucrative nonstop Philippines-United States market, think tank Capa-Center for Aviation said.

The aviation consultancy firm said Cebu Pacific was starting the next phase of its long-haul strategy, which previously only involved smaller Airbus A330-300s for routes in the Middle East and Australia.

The second-phase would possibly involve the acquisition of larger planes with longer range, like the A350 and B787. It said Cebu Pacific could issue a formal offer to both aircraft makers, based in France and the US, respectively, by the third quarter of 2017.

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A Cebu Pacific official did not immediately reply to a request for comment yesterday.

This developed as Cebu Pacific is expected to take delivery of its final eight A330s by the first half of 2017.

Those planes allowed the carrier, already the largest in terms of domestic market share, to reach farther international destinations—but not enough to access mainland United States.

Capa said Cebu Pacific was considering launching flights in certain cities in California, US. At present, flag carrier Philippine Airlines faces no competition in terms of nonstop flights between the US and the Philippines. This market has also been a major source of profits for PAL.

Previously, Cebu Pacific CEO Lance Gokongwei said the airline planned to launch flights to Hawaii, given the limited range of their aircraft. It initially planned the launch for the second half of 2016, but this has been pushed back.

Cebu Pacific is eyeing new markets after a strong 2016, thus far.

Its latest financial filing covering the first nine months of the year showed that profit doubled to P7.1 billion, from P3.56 billion in the same period last year, on better sales and the low price of oil.

A net loss in the third quarter alone narrowed to P583.65 million, compared to P1.64 billion last year, mainly as it pared hedging losses to P138.14 million, versus P1.58 bilion in Jan.-Sept. period of 2015.

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Demand, meanwhile, remained strong during the period.

Cebu Air said total revenue hit P46.69 billion in the nine months to September—a gain of 10.5 percent. This mainly came from passenger revenues, which rose 10.1 percent to P35.36 billion.

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TAGS: Airbus A330-300, Australia, Capa Center for Aviation, Cebu Pacific, cebu pacific air, Lance Gokongwei, Middle East, Philippines-United States market
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